Clueless economists are wringing their hands about the labor shortage without looking at the underlying causes, one of which is painfully obvious: the American economy now only works for the top 10%; the American Dream of turning labor into capital is now reserved for the already-wealthy.
As a result the Smart Crowd is opting out of the conventional workforce's debt-overwork-deadend-treadmill. What clueless economists, pundits and politicos don't dare acknowledge is that credentials and hard work are not a ticket to middle-class security; they're a ticket to impossible workloads demanded by global corporations and high-cost lifestyles anchored by student-loan debt, high rents and out-of-reach real estate.
In other words, credentials and hard work are a deadend. Costs rise faster than your income no matter how hard you work, and corporations are ruthlessly extractive despite the bogus PR of "we value our employees": just as government only values its tax-donkeys after they're gone, corporations only value their employees after they burn out and leave the Corporate America treadmill for good.
Credentials and hard work are a deadend financially and health-wise. The stress of overwork breaks down physical and mental health, slowly and then all at once. Financially, the endless inflation of asset bubbles means younger workers must buy assets at the top of the bubble and hope the bubbles won't pop--but since bubbles always pop, the game of enticing younger workers into buying overvalued stocks, junk bonds and houses is a deadend: rather than building real wealth, gambling in bubbles is ultimately destructive to both wealth and health, because once the phantom wealth generated by a bubble dissipates, those who believed it was all forever are devastated.
The hope that there will be a safe haven when bubbles pop is another aspect of this time it's different, and this belief has led many to drop out of the workforce to speculate their way to wealth. Given this is the greatest bubble of all time (GBOAT), this strategy has been gloriously successful, as the rising tide has raised all boats across virtually every asset class.
But few of the newly minted millionaires have any experience of bubbles popping, and so few are prepared for the end-game. Since bubbles often exhibit symmetry, the skyrocket ascent will likely be matched by a catastrophically steep decline that leaves this time it's different believers in disbelief.
Things are different for the top tier of the already-wealthy. When family money pays for college and the down payment on a house, the lucky offspring have no student-loan debt chains hobbling them and none of the hopeless Red Queen's Race of trying to save up a down payment as housing prices accelerate away from the hapless savers.
Family money offers other cost-free goodies to the fortunate offspring: use of the family vacation home, income from family trust-fund assets, the benefits of family connections (for example, the advantages given to alumni of prestigious schools in terms of admitting their offspring) and valuable class-based memberships, both formal and informal.
Trying to reach the same level as the already-wealthy is a path to burnout and frustration, as the chasm is too wide to leap. Those gambling in the GBOAT casino are winning now, but relying on number 22 coming up again and again is becoming increasingly risky. The speed with which the phantom wealth of debt-asset bubbles can collapse is not widely understood, and the collapse will catch most punters off-guard.
In other words, membership in the already-wealthy based on speculative gains may prove more temporary than expected.
There are many ways to opt out. Here's one account of one strategy: What I learned from living five years in a van (theguardian.com).
The already-wealthy and their minions are unprepared for the Smart Crowd opting out. In their precious naivete, the technocrat class reckons a few more dollars an hour will lure the Smart Crowd back into wage-debt-penury. The failure of their pathetic little carrot to entice the burned out donkeys back to the harness of making billionaires wealthier in exchange for, well, nothing of any real value, will be a great shock for those who believe that since the status quo works great for me, it works great for everybody.
The banquet of consequences hasn't even served the main course but it's on the way from the kitchen.
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